Can Employers Change Job Terms After Promotion Without Employee Consent? Seeking Advice

Hello Respected members,

I would like to kindly know whether an employer/company can change the terms of employment (like notice period) without mutual discussion and consent from the employee after the employee has been promoted. No terms and conditions change or anything similar was mentioned or communicated in the promotion letter. The employee has not agreed to any such conditions and has not given consent or signed any agreement. The appointment letter is the only contract signed.

Another senior person told the employee that since he got promoted, his employment terms changed as per HR policy. However, no such communication or discussion has been done by HR with the employee. In the HR policy, it is clearly mentioned that the employer and employee should have a mutual discussion, and the employee has to come to a mutual agreement and agree to the conditions. The employee has not done so, meaning no discussion has taken place, and no agreement has been given.

Please provide your valuable opinions/answers.

Employment Contracts and Changes Under Indian Law

Employment is essentially a contract under the Indian Contract Act, 1872. Therefore, the terms and conditions of such a contract can be varied later only with the consent of the other party to the contract. This is the general rule. If such a change is unilaterally done by one party, the other party is free to foreclose the contract on this ground.

Such a situation would lead to unrest and unnecessary disputes in the case of employment contracts covering industrial workmen. Therefore, in the interest of industrial peace and elimination of exploitation, the position slightly differs when such a contract of employment is covered by any Labor Law. In this case, the employer's right to change the existing conditions of service to the disadvantage of the employees is restricted to some extent. For example, Section 9-A of the ID Act, 1947 prescribes the issuance of 21 days' notice by the employer before effecting any change in respect of certain conditions of service enumerated in Schedule IV of the Act.

Equity and Justice in Employment Conditions

Equity and justice would require the same when the conditions of employment of higher cadre employees also get unilaterally changed by the employer without any notice. Here the employee has the freedom to terminate his contract if the change is not acceptable to him. But the case of promotion is different. Promotion automatically implies not only an increase in salary and perks but also enhanced responsibility and accountability. It is for the employee to accept the offer of promotion or forego it. He cannot insist on having the cake and eating it too. Normally, the terms and conditions of the higher position would be indicated in the orders of promotion, and as such, it has to be treated as sufficient notice.

Hi Sir, The terms and conditions, as well as information, were not mentioned in the promotion/appraisal letter, and none was communicated in any manner. The HR policy was changed after the promotion, and at that time, no communication was done. No discussion was held, and no information was shared.

Also, the HR policy (which was changed later on) states that both parties have to engage in mutual discussion and reach consent and agreement on the terms and conditions. However, no such discussion took place, and no agreement was reached.

Change of terms of employment can happen only with mutual consent. However, if the HR policy specifies different terms of employment, such as notice periods for different grades, then by accepting the promotion, the employee automatically agrees to the specified terms. This acceptance occurs when the promotion is accepted.

You may argue that the employee has not agreed to the terms, but by accepting the promotion and continuing to work, the employee has accepted the terms through their actions (deemed acceptance), which is allowed and valid under contract law.

Exceptions to Deemed Acceptance
The only cases where you can claim otherwise are if the employee can prove that they were never given the revised terms, requested them but were refused, or were never informed that there are different terms for different grades of employees.

The employee was never informed about new terms regarding grade, nor was any communication made in any form. When the promotion occurred, no such terms were present in the policy, and the policy was updated after the promotion. There is no date of update on the policy, and it lacks any signatures. He was never informed about new terms related to grade or group. There is no mention of a different notice period for different grades in the HR policy. The roles and responsibilities associated with the promotion are also not documented in any policy.

Since you are aware that the company's actions are illegal, you need to decide what course of action you wish to follow. Please see my post above. You need to determine whether it is worth fighting this matter. Consider future BVG, the cost of lawyers if you go to court, etc.

As per the available model standing, all terms are defined based on the level/designation with authority approval. The auto-implementation occurs when the level/designation changes.

I do not wish to file a case or fight against the company. I don't want money either. I just want to leave peacefully when my actual notice period, as per the appointment letter, is over. I am just looking into whether the employer can force me to stay and ask for money by saying such things without any written agreement between me and the employer?

I think the poster has been employed in a managerial position. As such, the contract of his employment alone can determine the mutual rights and obligations. When an employee moves up the organizational ladder, they are bound to alter according to job requirements. As Mr. Saswat has rightly observed, acceptance of a promotion automatically implies the acceptance of the conditions associated with the position. At times, it may not be administratively possible to notify the changes personally to the individual. However, such a change in the terms of the contract cannot be one-sided and opposed to public policy. In such a situation, the remedy lies in negotiation only, and when it fails, the employee has to simply quit the organization. In case of any tussle in that process, the employee has no remedy other than filing a Civil Suit. The employee should remember that the employer is always a superior party to the contract. But that should not dilute the employee's moral courage to put up a tough fight against an unethical employer.